US$2.3bn financial package agreement for Panama Canal

The allocation of the financial package, which will cover a portion of the US$5.25 billion total cost of the project, will be: Japan Bank for International Cooperation – US$800m, European Investment Bank – US$500m, Inter-American Development Bank – US$400m, Corporación Andina de Fomento and International Finance Corporation – US$300m each. The remaining amount for the project will be financed through Canal-generated cash flow.

The negotiated finance structure includes provisions for the ACP, including a 20-year amortising period with a 10-year grace period and establishes unsecured, untied financing for the ACP, whereby there are no prerequisites to contract from any one source. The ACP reached a “Common Terms Agreement” whereby the five agencies agreed to equivalent terms and conditions.

Expansion will mean a new lane of traffic along the Panama Canal through the construction of a new set of locks, which will double the capacity and allow more traffic and longer, wider ships.